EDITORIAL – CarePay audit: No clean bill of public health

“No doubt, whatever report the Internal Audit Unit produces on the procurement of the CarePay contract will make for interesting reading, that is, whenever the public is finally allowed to read it. What we do doubt, however, is that any material consequences will ensue from the findings of the report, or that any civil servants will be held accountable for any misconduct, neglect or gross ineptitude.”— “Auditing the CarePay audit,” Cayman Compass, Feb. 22, 2016

“As a result of our audit work, and the information which came to our attention, we did not find any evidence of misconduct or corruption on the part of public servants within the entities reviewed.”— “Internal Audit Special Investigation Report of the CarePay Procurement Process,” June 6, 2016

Wait a minute.

While we derive little satisfaction from predicting correctly that the Internal Audit Unit’s investigation into the CarePay debacle would yield a list of recommendations and little else, this case deserves further serious scrutiny.

For our readers who are new to the Cayman Islands, or who may appreciate a refresher: In February, accountant Canover Watson was sentenced to seven years in prison on charges of conspiracy to defraud, fraud on the government, breach of trust and conflict of interest, stemming from his actions while chairman of the Health Services Authority board.

Specifically, Watson conspired to skim profits from the contract for the public health system’s swipe-card (known as CarePay). He used his position on the board to direct the award of the multi-million dollar contract to CarePay contractor AIS Cayman Ltd., while disguising his and alleged co-conspirator Jeffrey Webb’s involvement in the company. They made off with hundreds of thousands of dollars. (Watson is appealing the verdict.)

Webb, of course, is the former head of Cayman and regional football who has been convicted in U.S. federal court for his central role in the unrelated global FIFA scandal. He is awaiting sentencing in the U.S.

At the conclusion of the CarePay trial in Cayman, Grand Court Justice Michael Mettyear told Watson, “The evidence against you was overwhelming. You conspired with Jeff Webb to steal money from the Cayman Islands government. You were able to succeed because of your position of power and trust as chairman of the Health Services Authority.”

He said, “You fooled a number of senior civil servants and possibly a minister. You tried to fool the jury, although you failed.”

Even though the jury trial resulted in the conviction of Watson, the courtroom testimony (particularly from very senior officials) served as a separate indictment — of the administration of public health in Cayman. In an editorial in February, we wrote, “In totality, the testimony paints a picture of dysfunction within the halls of government, with a broken system of ineffective public servants and appointed board members who deliver neither checks nor balances.”

The internal audit report reinforces that impression, in detail, including documentation of how the Public Management and Finance Law was broken during the CarePay procurement process.

The report also highlights the role of then-Health Minister Mark Scotland and his close working relationship with Watson in regard to the CarePay contract. Indeed, the prevalence of Mr. Scotland’s presence in the report is matched only by the conspicuity of his absence during the Watson trial.

And yet, although the government paid US$3.2 million to set up the CarePay system — including US$1.8 million for which the government received absolutely nothing in return — the internal audit report confines itself to recommendations to strengthen the system going forward.

In other words, individual accountability is nowhere to be found. Neither has government expressed any plan, or intention, of getting back the taxpayers’ money.

The audit report, however, won’t be the last word on CarePay. The police investigation can still be considered “active.” After all, Webb still faces charges as Watson’s alleged co-conspirator.

Case closed on CarePay? For the sake of the people of the Cayman Islands who are picking up the tab for this sordid affair, it better not be.